South Africa’s diesel generator market is expected to grow at a compound yearly growth rate of more than 2% from 2020 to 2025, according to a report released this year by research organisation Mordor Intelligence.
Factors such as an increase in throughput of peaking plants and demand for uninterrupted and reliable power supply are expected to boost the market. However, the availability of cleaner energy alternatives and the advancement of battery technologies may restrain market growth during the forecast period, the report claims.
The local diesel generator market segment is significant in terms of application, as it is a viable option for providing on-demand electricity throughout the country.
The report indicates, however, that the increasing popularity of hybrid generators and the rising reliability of hybrid systems may provide an opportunity in the generator industry, as hybrid systems’ use of various resources drives down the cost and reduces dependence on one fuel.
The increasing demand for uninterrupted and reliable power supply is expected to continue driving the market for generators over the next few years. Irregular power supply from beleaguered State-owned power utility Eskom and further investments in the diesel generator market segment are expected to drive demand.
Eskom continues to be under intense financial pressure, which has caused considerable problems in its project expansions, and may impede newer projects as well, further buoying the generator market.
Diesel generators in South Africa are not generally used as a primary source of energy, but rather as a backup during power cuts or blackouts from the utility grid.
However, they are occasionally used in remote areas where a direct connection with the grid is not feasible.
South Africa has the largest number of backup generators in Africa per capita, accounting for about 2.1 backup generators for every 100 people in 2019, with diesel fuel backup generators producing about 0.85% of the country's total power supply in the same year.
It is expected that any increase in South Africa’s economic growth will provide further growth in the segment.
The diesel generator market is partially fragmented and some of the key players, in order of market share, are original-equipment manufacturers Cummins, Kirloskar Oil Engines, Yanmar, Caterpillar and Honda Siel Power Products.